UC-NRLF 


YV 


GIFT  OF 


Will  the  Prevailing  Trend  To 

ward  Goverment  Control  of 

Industry  Destroy  Initiative 

in  Our  Young  Men? 


The  present  narrowed  aspect  of  California  and  the  Nation  as  a 
field  for  future  business  activities  of  the  youth,  as  compared  with 
the  wider  activities  presented  in  the  recent  past.  Influences 
which  have  produced  this  contraction  and  their  rapid  movement, 
through  the  medium  of  restriction,  towards  evolving  the  govern- 
ment from  existing  forms  into  centralized  absolutism.  State 
initiative  necessary  if  the  scope  of  personal  initiative  be  circum- 
scribed. Business  prosperity,  and  averting  of  war  otherwise  in- 
evitable, possible  only  through  interrupting  this  tendency  and 
restoring  liberty  to  the  citizen.  Supreme  test  of  the  capacity  of 
the  people  to  rule,  and  incident  success  of  the  republican  form 
of  government,  to  be  determined  by  their  ability  to  change  the 
trend  towards  privilege  into  a  status  of  freedom  and  equal  right. 


Let  the  spirit  of  Society  be  free  and  strong,  that  is  to  say, 
let  true  principles  inspire  the  members  of  Society,  then  neither 
can  disorders  accumulate  in  its  Practice.  Carlyle:  Character- 
istics. 


AN  ADDRESS 

Delivered  before  an  assemblage  of  business  men  at  the  San  Francisco 
Chamber  of  Commerce  on  the  evening   of  April   14th,   1915. 

By  JOHN  E.  BENNETT 
of  the  San  Francisco  Bar 

Issued  by 
Business  Men's  Economic  Association, 


WRITINGS  OF  JOHN  E.  BENNETT 

PAMPHLETS 

OUR  NATIONAL  TENDENCY  AND  ITS  GOAL 

Being  a  discussion  of  the  Political  and  Industrial  direction  of  the  United  States 
under  the  influence  of  prevailing  economic  forces,  and  statement  of  the  causes 
thereof,  and  the  means  to  avert  the  conclusion  to  which  those  forces  are  pro- 
ceeding. 

Together  with  an  Address  before  the  Chinese  Students' 
Association  of  America  at  its  Convention  held  in  San 
Francisco  in  January,  1914, 

upon 

THE  STUDENT  IN  ORIENTAL  IMMIGRATION 

Considering  the  effect  upon  China  and  Japan  of  the  Policy  of  the  United  States 
in  shutting  off  migration  of  the  Orient  with  the  West,  the  real  cause  that  moves 
industrial  migration,  and  the  condition  that  confronts  Oriental  Students  seeking 
education  in  the  United  States,  by  reason  of  these  influences. 

32  pp. 

"JAPAN'S  MESSAGE  TO  AMERICA" 

(A  Reply) 

Considering  the  impelling  cause  which  moves  the  Japanese  nation  to  desire  the  good 
will  of  the  American  people ;  the  necessity  to  Japan  of  free  intercourse  with  the 
civilization  of  the  West,  now  shut  off  by  immigration  exclusion;  the  calamity  which 
inevitably  must  befall  that  nation  through  a  continuance  of  the  isolation  thrust 
upon  her  by  this  policy.  The  doctrine  of  exclusion  shown  to  rest  upon  a  mistaken 
belief  regarding  the  effect  of  labor  immigration  upon  wages  of  intro-country  work- 
men; the  popular  opinion  being  that  such  immigration  lowers  wages,  whereas,  in 
truth,  it  raises  wages  and  increases  general  prosperity. 

33pp. 

THE  INDUSTRIAL  UNREST 

Noting  the  rise  and  forms  of  human  government.  The  movement  for  expunging 
the  Constitution  of  the  United  States,  with  the  cause  and  processes  of  that  move- 
ment. The  passing  of  the  American  Commonwealth  and  the  evolution  of  the 
centralized  State  in  its  stead;  with  observation  of  the  several  forces  responsible 
therefor.  Remarking  the  various  expedients  for  relief  of  the  working  classes, 
among  which,  the  California  eight-hour  labor  initiatives,  and  sundry  others.  The 
basic  errors  of  such  proposals,  and  the  hopelessness  of  benefit  to  the  working 
people  through  pusuit  of  their  direction.  Together  with  consideration  of  the  true 
cause  of  prevailing  wrong  conditions  within  the  nation,  and  the  disaster  in  which 
these  must  culminate  unless  they  be  intelligently  and  courageously  corrected. 

70  pp. 


THE  CALIFORNIA  MANUFACTURER  AND  EASTERN  COMPETITION 
The  natural  evolution  of  the  State  from  an  agricultural  into  a  manufacturing  com- 
munity shown  to  be  held  in  abeyance  by  artificial  wage  rates  and  conditions  im- 
posed upon  employers  by  unions.  Helplessness  of  the  California  manufacturer  in 
the  field  of  competition  through  these  influences,  and  the  inevitable  passing  of  the 
important  manufacturing  industries  of  the  State  unless  the  employer  shall  assert 
control  of  his  establishment  and  place  his  labor  on  a  basis  of  free  industry.  Arti- 
ficially high  wages  shown  to  be  of  no  benefit  to  the  laborer  receiving  them,  while 
the  consequent  narrowing  of  the  industrial  field  suppresses  business  and  produces 
ever  increasing  numbers  of  idle  workmen.  The  remedy  and  proper  line  of  opera- 
tion presented,  and  the  vast  opportunity  at  the  hands  of  the  manufacturer  in  sup- 
plying the  local  and  over-sea  trade  considered. 

35pp. 

Copies  of  the  within  pamphlets  or  booklets  may  be  had  by  addressing 

BUSINESS  MEN'S  ECONOMIC  ASSOCIATION 

1310  Humboldt  Bank  Building 

San  Francisco,  Cal. 


Will  the  Prevailing  Trend  To 

ward  Goverment  Control  of 

Industry  Destroy  Initiative 

in  Our  Young  Men? 


The  present  narrowed  aspect  of  California  and  the  Nation  as  a 
field  for  future  business  activities  of  the  youth,  as  compared  with 
the  wider  activities  presented  in  the  recent  past.  Influences 
which  have  produced  this  contraction  and  their  rapid  movement, 
through  the  medium  of  restriction,  towards  evolving  the  govern- 
ment from  existing  forms  into  centralized  absolutism.  State 
initiative  necessary  if  the  scope  of  personal  initiative  be  circum- 
scribed. Business  prosperity,  and  averting  of  war  otherwise  in- 
evitable, possible  only  through  interrupting  this  tendency  and 
restoring  liberty  to  the  citizen.  Supreme  test  of  the  capacity  of 
the  people  to  rule,  and  incident  success  of  the  republican  form 
of  government,  to  be  determined  by  their  ability  to  change  the 
trend  towards  privilege  into  a  status  of  freedom  and  equal  right. 


Let  the  spirit  of  Society  be  free  and  strong,  that  is  to  say, 
let  true  principles  inspire  the  members  of  Society,  then  neither 
can  disorders  accumulate  in  its  Practice.  Carlyle:  Character- 
istics. 


AN  ADDRESS 

Delivered  before  an  assemblage  of  business  men  at  the  San  Francisco 
Chamber  of  Commerce  on   the  evening   of  April    14th,    1915. 

By  John   E.  Bennett  of  the  San  Francisco   Bar 


Issued  by 
Business   Men's   Economic   Association. 


Will  the  Prevailing  Trend  toward  Government 

Control  of  Industry,  Destroy  Initiative 

in  Our  Young  Men? 


BY  JOHN    E.    BENNETT. 


Being  requested  by  a  number  of  leading  business  men  of  San  Francisco  to  address 
them  upon  the  above  subject,  a  meeting  was  held  at  the  San  Francisco 
Chamber  of  Commerce  at  which  Mr.  Bennett  delivered  the  following: 

Gentlemen : — I  thank  you  for  the  honor  you  have  conferred  upon  me 
in  inviting  me  to  meet  with  you,  and  for  the  opportunity  you  have  given 
me  to  address  you  upon  the  most  important  subject  which  has  been 
selected  for  this  lecture. 

The  question  is  one  of  grave  moment,  of  deep  concern  to  the  State 
and  Nation.  There  may  be  those  among  us  who,  having  acquired  for- 
tunes and  entered  upon  that  period  of  life  when  exertion  is  no  longer  the 
characteristic  note  of  our  daily  habit,  but  relaxation  attends  us,  and  we 
are  disposed  to  let  things  go  much  as  they  will  without  effort  to  stem  or 
deflect  the  tide  of  public  affairs,  feeling  that  the  great  maelstrom  of  dis- 
turbance and  interrogation  that  is  swirling  about  us  is  least  of  all  a 
matter  for  us,  that  we  have  no  time  to  give  it  and  are  not  disposed  to 
look  into  it,  that  what  strength  we  have  left  must  be  preserved  for  our 
own  concerns  and  we  will  not  bother  with  things  which  do  not  immedi- 
ately touch  us — this  is  the  way  that  hundreds  of  thousands  of  business 
men  are  feeling  and  acting  today :  very  well,  let  us  strike  ourselves  out 
of  the  commonwealth,  and  let  the  old  ball  go  spinning1  along  as  she  will, 
and  we  stand  by  as  mere  observers  with  no  active  part  in  the  movement 
at  all.  So  much  for  you,  my  business  friend,  but  what  about  your  son? 
What  kind  of  a  State  and  Nation  is  this  that  you  are  leaving  to  him? 
You  have  nourished  him  and  brought  him  forward;  sustained  him  through 
the  schools;  he  has  completed  his  course  at  the  university,  and  now  he 
sits  yonder  at  his  desk  in  your  office,  and  presently  he  will  sit  at  your 
desk.  He  is  a  bright,  alert,  eager  lad;  teeming  with  energy,  filled  with 
enterprise;  he  is  scheming  methods  of  expanding  the  business,  of  increas- 
ing trade — what  about  the  State  and  Country  you  are  leaving  to  that 
boy?  It  is  a  different  State  and  Country  from  what  your  father  left  you. 
In  the  sixties,  the  seventies,  the  eighties  and  even  the  early  nineties, 
California  was  a  land  where  opportunity  abounded,  where  fields  of  busi- 
ness in  all  lines  were  open  and  inviting,  where  one  might  enter  business 
with  little  capital  and  in  a  short  while  build  himself  into  a  competence  if 

320,334 


not  ^.  ioii&ns. ;  THerS  ^a.s  Development,  there  was  transportation  •  ranch- 
ing, mines,  forests;  there  was  trade,  there  was  shipping,  there  was  manu- 
factures. Energetic  men  were  threading  the  State  with  railroads ;  others 
were  weaving  networks  of  irrigation  reservoirs  and  canals ;  the  mountains 
were  peopled  with  prospectors,  while  colonization  enterprises  were 
bringing  thousands  into  the  State.  It  is  quite  different  now.  Despite 
the  earnest  and  efficient  activities  of  this  Chamber  of  Commerce  and  its 
kindred  bodies,  and  notwithstanding  the  larger  population  of  the  State, 
and  the  coming  forward  of  many  new  inventions  with  their  increase  and 
enlargement  of  facilities  which  ought  to  greatly  enhance  opportunity,  we 
find  a  tendency  to  cecession  of  intiative  in  many  lines.  The  promoter  has 
all  but  disappeared.  Enterprises,  such  as  the  Ocean  Shore  and  Western 

f  „             .  Pacific   Railroads,  which  thirty  or  even  twenty 

Failure  of  Enterprises  .   ,      ,           ,  i       •  , 

T  M       f  TTTI  '  i  years   ago  might  have  been   started   with   con- 

the  Like  of  Which  fe,  .       _ 

n  ndence  ot  success,  as  the    Dononoe    road    was 

formerly  Succeeded.  ,  u          '           _                 c 

started,  as  the  Narrow  Gauge  to  San  Jose  and 

Alameda  was  started,  now  fail  miserably  for  lack  of  confidence  in  new 
enterprise  by  the  investing  public,  while  railroads  of  long  standing  and 
of  established  position  must  find  their  money  supplies,  not  through  the 
erstwhile  medium  of  long  time  bonds,  but  in  short  term  notes.  Projects 
of  sound  character,  a  score  of  which  are  known  to  you  as  having  their 
origin  here  in  San  Francisco,  moved  by  men  of  business  who  two  decades 
ago  would  have  had  no  difficulty  in  getting  them  successfully  under  way, 
now  wither  and  perish,  and  the  men  in  control  of  them  look  for  avenues 
of  escape  from  their  predicaments.  Concerns  which  have  done  business 
for  years,  of  which  any  man  before  me  could  enumerate  a  list,  close  up 
and  withdraw  from  affairs  because  conditions  have  made  it  impracticable 
to  continue. 

And  yet  if  we  consult  the  government  statistics,  the  latest  census, 
we  shall  find  record  of  an  increase  both  of  capital  invested  and  number  of 
business  establishments  within  the  State,  just  as  there  is  also  increase  in 
population.  Bear  in  mind  that  progress  will  go  on.  When  our  annals  re- 
veal that  in  time  of  peace  with  increasing  population,  business  no  longer 
shows  increase,  then  has  civilization  already  relapsed  and  is  far  along 
on  its  retrograde  course. 

What  is  initiative  is  the  sense  in  which  it  here  concerns  us?  It  is  the 
disposition  and  ability  to  set  on  foot  new  enterprise.  Here  then,  we  have 
in  our  boy  the  power  and  the  wish  to  start  things ;  but  in  order  for  him  to 
exercise  this,  there  must  be  about  him  opportunity.  To  act  he  must  first 
see  a  chance  to  do  business.  Now  what  is  business?  Business  consists  of 
service  by  men  upon  each  other.  That  is  all  it  is ;  it  is  simply  service. 
However  this  is  yielded,  whether  with  bare  hands  and  sinewy  back,  with 
skill  and  judgment,  with  goods,  wares  and  merchandise,  with  steamships 
or  railroads,  it  is  rendition  of  service  by  one  upon  another.  And  Nature 
has  so  schemed  it  that  for  this  service  there  is  no  end  of  man's  desire. 


No  one  has  all  he  wants.  Gratify  the  craving  for  necessities,  and  imme- 
diately taste  arises  to  discriminate  and  select;  and  the  mind  erects  ideals 
and  states  of  feelings  to  be  attained  through  the  acquisition  of  material 
things.  We  wish  more  and  finer  clothes;  a  more  imposing  residence;  a 
more  Ixurious  table  and  elaborate  service ;  and  when  these  are  furnished 
there  is  an  unlimited  field  of  desire  for  power  over  the  wills  of  others 
and  to  stand  in  the  esteem  of  others. 

Moreover  along  with  this  desire  for  the  service  of  others  there  goes 
an  equally  strong  bent  on  the  part  of  the  person  to  furnish  his  services  to 
others.  He  wishes  to  facilitate  his  fellows,  no  less  than  he  wishes  to 
appease  his  desires  through  what  they  may  do  for  him.  Indeed,  the  grati- 
fication of  his  wish  for  service  has  just  that  limit :  it  is  circumscribed  by 
the  powers  of  the  individual  to  render  service.  A  man  cannot  get  more 
than  pay  for  what  he  puts  forth. 

Such  then  being  the  character  of  business,  that  it  rests  upon  service 
and  consists  of  service,  and  as  all  men  constantly  and  endlessly  desire 
service,  and  are  at  all  times  willing  to  contribute  service  to  the  end  that 
they  may  receive  service,  it  can  be  seen  that  in  order  that  business  should 
be  normal  there  ought  to  be  no  clogs,  no  interference  interposed  to  the 
free  action  of  men,  save  only  where  such  interference  is  placed  against 
their  doing  injury  to  each  other.  So  that  the  first  requisite  to  initiative  is 
freedom  of  action. 

And  in  this  behalf  it  may  be  said  that  history  shows  a  continuous 
warfare  between  freedom  and  restriction,  between  liberty  and  privilege. 
It  shows  this  also :  that  whereas  from  the  beginning  of  man's  career  upon 
earth  there  has,  from  the  ape  to  the  modern  human,  been  a  continuous  line 
of  progress,  an  unceasing  expansion  of  the  spiritual  nature  of  man  as 

_  ,      distinguished  from  his  physical  body,  so  also  has 

Movement  Toward 

_  -  _,      there  simultaneously  developed  an  ever  larger  and 

Freedom  Cannot  Be    ,  .  J.       ,  .  °     .    ,. 

_  ,    larger  measure  of  freedom  of  action  to  the  mdi- 

Permanently  Stayed.     .,,-„•  •_, 

vidual.    Human  progress  may  therefore  be  said  to 

consist  of  and  to  comprise  the  evolution  of  man  toward  individual  free- 
dom. This  movement  is  irresistible.  The  very  efforts  made  to  stop  it 
have  but  accelerated  and  secured  its  advance.  King  after  king  has  tried 
'to  stay  its  course,  and  their  heads  have  rolled  into  the  basket  while  the 
tide  has  swept  on. 

In  every  age,  however,  this  trend  towards  freedom  has  had  to  combat 
the  contrary  set  towards  subjection;  and  this  latter  influence  is  as 
strongly  active  at  present  as  at  any  prior  time  in  the  career  of  the  human. 
The  field  for  the  exercise  of  initiative  which  our  young  man  will  find 
before  him  today,  whatever  the  prevailing  influences  may  be  tending  to 
narrow  it,  is  a  vastly  larger  field  than  he  would  have  found  open  to  him 
in  the  time  of  Elizabeth.  In  that  day  and  prior,  reaching  back  into  the 
period  of  the  Roman  Empire  and  beyond,  the  exercise  of  initiative  was 
hedged  by  the  existence  of  immense  numbers  of  business  monopolies, 


being  grants  from  the  Crown,  or  royal  rights  to  conduct  businesses,  entry 
into  which  was  thereby  denied  to  others.  Almost  every  commodity,  from 
salt  to  soap,  from  coal  to  leather  was  in  the  hands  of  persons  holding 
government  patents  giving  them  exclusive  privileges  to  produce  and  sell 
such  articles.  Grants  were  bestowed  upon  courtiers  and  favorites  to  do 
all  the  merchandising  in  given  towns,  and  these  royal  purveyors  would 
hark  into  a  community  and  under  the  exercise  of  their  concessions,  put 
out  of  business  every  merchant  in  the  place.  Under  the  Roman  system 
these  monopolies  were  auctioned  off,  sold  to  the  highest  bidder,  and  those 
who  bought  them  and  farmed  them  out  were  known  as  publicani;  the 
odium  into  which  this  profession  fell  is  reflected  by  frequent  association 
which  we  find  in  ancient  writings  of  the  publican  with  the  harlot — liter- 
ally, the  outcasts  of  society. 

As  at  present  when  a  monopoly  exists,  there  was  invariably  presented 
some  specious  reason  for  its  creation,  some  public  benefit  which  would  be 
attained  by  establishing  the  monopoly.  Thus  a  grant  of  monopoly  of  selling 
playing  cards  was  made  because  "divers  subjects  of  able  bodies  which  might 
go  to  plough,  did  employ  themselves  in  the  art  of  making  cards" ;  and  a 
monopoly  for  the  sale  of  starch  was  justified  on  the  ground  that  it  would 
prevent  wheat  being  wasted  for  the  purpose. 

This  proscription,  this  denial  of  liberty  was,  as  I  remark,  opposed  by  the 
counter  and  ever  expanding  influence  making  toward  freedom.  The  English 
parliament  from  1565  to  1601  was  a  forum  of  angry  discussion  growing  out 
of  the  existence  of  these  special  privileges.  A  list  of  them  was  read  to  the 
Commons:  "Is  not  bread  among  the  number?"  cried  out  a  member,  and  in 
the  uproar  which  followed  the  voice  went  on :  "Nay,  if  no  remedy  is  found, 
bread  will  be  there  before  the  next  parliament."  The  Queen,  however,  re- 
sisted: she  "hoped  her  dutiful  and  loving  subjects  would  not  take  away  her 
prerogative,  which  is  the  choicest  flower  in  her  garden,  and  the  principle  and 
head  pearl  in  her  crown  and  diadem."  Notwithstanding  which  protest,  the 
forces  of  freedom  prevailed,  as  they  always  prevail,  when  they  are  aroused. 
Monopolies  in  this  and  the  succeeding  reign  were,  largely  wiped  out,  being 
cut  down  to  a  few  objects,  limited  privileges  chiefly  to  inventors  for  the 
manufacture  and  sale  of  their  inventions.  From  this  we  get  our  patent  laws. 
The  licenses  now  collected  by  our  municipalities  for  conducting  business  are' 
also  survivals  of  these  old  monopolies,  which  carried  with  them  a  charge  to  be 
paid  to  the  crown. 

Not  only  was  the  zone  of  opportunity  for  the  exercise  of  initiative  cir- 
cumscribed by  these  multitudinous  monopolies,  but  it  was  further  restricted, 

just  as  it  is  restricted  today,  by  erroneous 
Business  Obstructed  by  J  .  .  ,  .  L  \  .  \  .  _, 

economic  concepts  carried  into  legislation.     Ine 

Legislation  Based  Upon          .  .  Jf .  ,  .    . 

_.  .  business  of  jobbing,  and  to  some  extent,  whol- 

Erroneous  Economics.  ...  ,.,  ;;    ,     rT,u.  n    , 

saling,  was  prohibited.  This  was  called  engross- 
ing or  re  grating.  In  1552  a  statute  punished  with  fines,  imprisonment  and 
the  pillory  the  "buying  of  growing  corn,  or  corn  of  any  kind,  grain,  hops, 

6 


butter,  cheese,  fish  or  other  dead  vitual,  with  intent  to  sell  the  same  again." 
The  theory  was  that  when  cereals  were  plentiful  in  any  district  they  should 
be  consumed  at  what  they  would  bring,  without  much  thought  as  to  whether 
the  next  harvest  might  be  equally  abundant,  or  to  what  immediate  wants 
might  be  of  an  adjacent  province  of  the  same  country.  This  law  was  con- 
tinued in  force  until  recent  years.  In  1800  one  John  Busby  was  convicted  of 
having  bought  ninety  quarters  of  oats  at  41  shillings  per  quarter  and  selling 
thirty  of  them  the  same  day  at  43  shillings  per  quarter.  The  law  was  not 
repealed  until  1848. 

As  at  the  present  time  popular  prejudice  looked  only  to  effects  and  not 
to  causes ;  and  legislation  tried  to  remedy  evils  by  combatting  effects  without 
analysing  the  condition  and  reaching  with  its  corrective  laws  the  cause.  The 
reason  for  the  laws  against  engrossing  was  that  a  capitalist  or  a  pool  might 
buy  up  all  the  food  in  a  district  and  without  moving  it  hold  the  same  against 
use  for  higher  prices.  Thus  what  we  know  in  modern  times  as  a  "corner" 
would  be  created  and  many  people,  unable  to  pay  the  higher  prices  would, 
because  of  the  pool,  suffer  for  food.  The  remedy  was  not  to  tie  the  hands  of 
business  men  in  quest  of  profit,  for  warehousing,  jobbing  and  wholesaling 
are  necessary  factors  in  the  handling  of  produce ;  but  to  increase  the  facilities 
for  transportation,  whereby  scarcity  in  one  district,  whether  real  or  artificial, 
might  be  easily  relieved  by  the  abundance  in  another  district ;  for  in  that  day 
the  highways  were  gullies  of  mud  and  the  cars  were  wagons  drawn  by  oxen. 
The  modern  corner  in  food  supplies  was  made  possible,  not  through  lack  of 
transportation,  which  is  now  no  longer  an  obstacle,  but  through  lack  of  in- 
formation. High  prices  in  wheat  were  created  for  a  time  by  an  operation  on 
the  Chicago  grain  exchange,  because  people  did  not  know  what  the  forth- 
coming supplies  of  wheat  in  the  world,  and  hence  in  the  market,  would  be. 
This  evil  was  corrected  by  a  Californian,  Mr.  David  Lubin,  who  through  the 
aid  of  the  King  of  Italy,  established  the  International  Institution  of  Agricul- 
ture at  Rome,  through  which  data  upon  crops  are  gathered  from  all  over  the 
world,  and  being  published,  made  it  possible  to  rapidly  draw  supplies  from 
places  of  plenty  to  places  of  dearth,  and  made  the  corner,  which  always  oper- 
ated within  a  limited  area,  impracticable. 

So  we  observe,  let  me  repeat,  all  through  the  history  of  business,  which 
is  really  the  history  of  human  affairs,  aside  from  the  mere  narratives  of  mili- 
tary campaigns,  a  constant  pressure  and  progress  of  man  toward  an  ever 
widening  scope  of  individual  action ;  in  other  words,  toward  more  perfect  and 
untrammeled  freedom.  We  find  this  trend  halted  and  thrown  back  from 
time  to  time  by  the  contrary  tendency  towards  special  privilege ;  by  the 
endowing  of  favored  ones  by  political  power,  with  permits  to  do  things,  to 
serve,  which  are  denied  to  others.  When  this  evil  trend  occurs  we  find  it  con- 
tinues until  it  becomes  intolerable,  when  it  is  overthrown,  sometimes  through 
the  use  of  reason  and  enlightenment,  and  failing  this,  then  by  war,  for  there 
be  but  two  ways,  and  the  forces  of  freedom  pushing  on  their  course  toward 
their  ultimate  goal  of  equal  right. 

7 


And  in  this  behalf  let  us  consider  this  goal  of  equal  right :  Of  what  does 
equal  right  consist?  Does  it  consist  of  every  man  doing  absolutely  as  he 
pleases,  with  no  check  and  no  curb  but  his  own  notion  of  how  far  he  should 
go  and  where  he  should  stop?  That  is  what  the  anarchists  say,  but  they  are 
very  much  mistaken.  Human  society  could  not  exist,  men  could  not  dwell 
together  where  every  man  was  a  law  unto  himself.  There  would  in  such 
communities  be  safety  for  no  one.  There  must  be  some  common  line  which 
all  men  will  recognize  as  the  limits  respectively  of  their  conduct,  beyond 
which  they  shall  not  go,  and  there  must  be  some  power  to  hold  them  to  that 
line.  What  then  is  this?  It  is  the  line  between  right  and  wrong,  and  the 
power  that  has  this  in  charge  is  the  State. 

It  is  the  function  and  duty  of  the  State  therefore,  to  preserve  and  defend 
the  citizen  against  injury;  in  other  words,  to  maintain  order,  to  secure  the 

public  safety ;  and  when  vou  look  to  it,  this  is  its  sole 
Limitations  of  the  .  ,    r         '  .  .       .;•«.. 

„         .  r   ,      _  rightful  office.    F  or  in  so  doing  it  discharges  all  the 

Functions  of  the  State.      *         .        .     c,  .        ,*. 

duties  that  the  State  ought  to  exercise.    The  public 

safety  comprises  the  public  health,  the  preservation  of  order,  which  is  equally 
the  preservation  of  property  against  fire  or  other  destructive  elements,  the 
administration  of  justice  and  public  education.  You  cannot  conceive  of  any- 
thing which  government  ought  properly  to  do  that  does  not  fall  under  one  or 
more  of  these  heads.  Essentially  an  embodiment  of  force,  comprising  the 
collective  force  of  the  whole  people,  the  State  administers  its  functions  by 
commands.  It  is  the  very  antithesis  to  utilitarian  business,  which  proceeds 
altogether,  not  upon  coercion,  but  upon  agreement.  Understanding,  there- 
fore, the  province  of  the  State,  we  have  no  difficulty  in  recognizing  the  rights 
cf  the  individual;  for  the  individual  has  all  rights  which  do  not  fall  within 
the  purview  of  the  prerogatives  of  the  State.  When  the  first  man  came  upon 
earth  he  had  all  rights  of  every  character.  He  had  dominion  over  the  earth 
and  over  every  living  thing.  When  the  next  man  came  the  rights  of  the  first 
man  were  limited  by  the  like  rights  of  the  second  man ;  and  as  the  number 
ftf  men  increased  it  soon  became  apparent  that  a  power  must  be  vested  some- 
where to  secure  each  man  in  the  exercise  of  his  rights.  Thus  the  State,  or 
government,  was  established ;  so  that  when  we  come  to  define  the  rights  of 
the  individual,  we  say  that  he  has  all  rights  up  to  where  their  exercise 
trenches  upon  like  rights  of  his  neighbor,  and  that  the  State  exists  to  hold  a 
balance  hand  between  them.  The  definition  of  human  rights  was  long  a 
subject  of  controversy.  They  were  explicitly  fixed,  in  so  far  as  this  nation 
is  concerned,  by  the  Declaration  of  Independence,  one  of  the  basic  charters 
of  our  liberties.  They  are  there  declared  to  be  the  right  of  the  man  to 
life,  no  one  can  have  a  right  to  kill  him  or  to  impair  his  health ;  his  right  to 
liberty;  no  one  can  have  a  right  to  enslave  him;  his  right  to  pursue  the 
objects  which  contribute  to  his  happiness,  and  this  is  the  right  we  are  dealing 
with  tonight,  for  it  is  nothing  other  than  the  right  to  the  free  exercise  of 
initiative. 

8 


Regarding  the  office  of  the  State  and  the  right  of  the  citizen,  we  can 
see  that  the  only  circumstance  that  can  call  forth  the  powers  of  the  State 
against  a  citizen  is  where  a  wrong  has  been  perpetrated;  that  the  only  in- 
stance that  can  call  forth  the  powers  of  the  State  in  behalf  of  an  individual 
is  where  a  right  has  been  violated.  That  the  force  or  interference  of  the 
State  can  never  justly  or  properly  be  brought  to  bear  against  anyone  where 
that  person  is  in  position  of  right,  is  exercising  a  right.  The  test  then, 
always,  when  the  hand  of  the  State  is  invoked  against  any  person,  is :  has  the 
person  in  whose  behalf  it  is  raised,  been  done  any  wrong,  or  has  he  been 
denied  anything  to  which  he  is  entitled  ? 

Despite  this  truth  we  today  find  the  State  in  situations  where  it  is  exer- 
cising powers  against  those  who  are  in  positions  of  right  and  in  favor  of 

those  who  have  no  rights  in  the  premises.    Take 
The  United  States  .      TT  .     ,    c.  ,  T    ,         , 

r  T    u       A        tne   United   States   Department  of  Labor,   for 
Department  of  Labor'An     .  .  ..    , 

.  _  instance;  here  is  an  arm    of  the    government 

Anomaly  in  Our  System.  '  . 

whose  office  it    is    to    force    the  demands  of 

laborers  upon  employers.  It  proceeds  upon  the  assumption  that  a  demand 
made  by  the  laborer  upon  the  employer  is  not  to  be  met  by  a  severance  of 
the  relation  if  insisted  upon  and  refused,  but  that  the  employee  is  to  remain 
in  the  service,  and  the  employer  is  to  be  brought  as  far  around  to  the  terms 
of  the  demand  as  he  can  be  made  to  come  through  the  pressure  of  the  De- 
partment and  the  threat  of  strike.  That  a  man  who  has  employed  another 
has  a  right  to  discharge  him  whenever  he  wills  to  do  so,  can  never  be 
gainsaid.  Instantly  this  is  denied  by  law  the  laborer  becomes  saddled  upon 
the  employer  against  the  latter's  will,  and  the  property  of  the  employer  is 
exappropriated  and  set  aside  to  the  use  of  the  laborer.  It  is  only  in  the  high 
handed  operations  of  war,  that  men  can  lawfully  be  quartered  upon  other 
men  against  their  wills.  Yet  so  far  have  we  drifted  from  our  concepts  of 
right  and  liberty  with  which  we  were  imbued  at  the  date  of  the  installation 
of  this  same  Federal  government,  that  to  the  country  generally  the  estab- 
lishment of  this  anomalous  institution,  the  Department  of  Labor,  with  its 
avowed  principles  of  special  privilege  engrafted  on  the  tree  of  liberty,  causes 
but  slight  remark. 

Take  also  the  public  utility  commissions,  now  rapidly  coming  to  compass 
all  corporate  effort.  Here  the  State  represents  the  customer  against  the 
speller,  and  steps  forward  to  compel  the  seller  to  supply  his  service  or  his 
goods  at  prices  which  the  customer  may  fix.  The  seller  says :  prices  should 
be  fixed  by  competition.  The  State  replies :  you  are  a  natural  monopoly  and 
competition  cannot  enter.  Yet  we  know  this  is  not  a  fact.  There  is  no  rail- 
road that  ever  existed  which  was  a  monopoly  any  longer  than  it  built  up 
business  sufficiently  extensive  to  justify  a  competitor  entering  the  field.  You 
have  before  your  eyes  daily  an  exhibition  of  this  truth.  A  year  ago  it  was 
thought  that  a  street  railway  was  in  every  sense  a  monopoly ;  yet  we  have 
seen  the  swarms  of  competition  offered  it  by  the  jitneys.  It  is  the  principle 
of  the  State  on  which  this  commission  legislation  is  based,  that  monopoly 

9 


should  be  maintained ;  that  the  field  of  monopoly  should  be  kept  clear  of 
competitors;  hence  the  Commission  reserves  the  right  to  withhold  the  issu- 
ance of  certificates  of  public  convenience  and  necessity  to  persons  proposing 
to  enter  and  compete  in  given  fields.  Then,  maintaining  intact  monopolies, 
the  State  will  protect  the  customer  against  excessive  prices,  in  other  words, 
will  do  for  the  customer  what  competition  would  do  for  him,  by  determining 
the  rates  which  the  monopoly  is  to  charge.  The  principle  is  injurious  in 
three  ways:  by  asserting  control  over  the  field  and  refusing  to  admit  com- 
petitors it  narrows  the  zone  of  initiative,  tends  to  hold  the  concern  occupying 
the  field  to  out-of-date  methods  and  appliances,  thus  deterring  progress  and 
depriving  industry  of  opportunity  in  the  bringing  forward  of  new  methods 
and  mechanisms.  It  places  an  inordinate  power  in  the  hands  of  the  ruling 
group  or  head  in  government,  since  this  authority  controlling  the  oppoint- 
ment  of  commissions  may  by  perversion  or  corruption  control  the  rates  of 
the  large  concerns  under  its  sway,  thus  moving  them  to  do  his  bidding,  which 
must  necessarily  be  in  direction  of  autocratic  government.  And  as  the  de- 
mands of  the  customer  are  for  service  at  the  very  lowest  rates,  we  find  in 
practice  a  tendency  of  these  commissions  to  eliminate  profits  from  the  busi- 
nesses they  control,  and  to  hold  rates  down  to  costs  and  interest  upon  capital 
actually  invested.  This  has  made  the  whole  region  of  public  utilities  not  only 
unattractive  to  capital  investment  from  the  standpoint  of  new  enterprise, 
even  in  those  localities  where  they  are  not  forbidden  to  enter  by  reason  of 
the  presence  of  some  concern  in  the  field,  thereby  immensely  narrowing  the 
area  of  initiative,  but  it  has  made  unattractive  the  security  issues  of  these 
concerns,  so  that  even  those  in  the  field  often  cannot  find  needed  money  for 
making  the  additions  to  their  properties  which  increase  of  population  and 
incident  traffic,  demands. 

A  seat  in  the  New  York  Stock  Exchange  sold  last  week  for  $48,500, 
In  1906,  when  I  was  in  New  York,  the  price  of  a  seat  had  stood  for  two  years 
at  $95,000.  The  clearances  at  the  clearing  house  for  that  year  amounted 
to  103  billions  of  dollars ;  they  have,  with  fluctuations,  been  falling  ever 
since;  last  year  they  were  eighty-nine  billions  of  dollars. 

The  policy  of  controlling  by  the  State  rates  of  utilities,  prices  of  com- 
modities, or  rates  of  wages,  as  is  now  being  done  in  some  countries,  and  will 

_   ..  .  presently  be  done  here  if  the  tendency  be  not  cor- 

Erroneous  Policies  ,    .  ,.       .     ,      .  .      .  ,  , 

rected,  is  erroneous.    Men  in  business  should  be  per- 
mitted to  make  all  the  money  they  lawfully  can.  and 

Utility  Commissions.      ,  f  .      f  .          .  T  ,   J          .  ,     .          .   ,  , 

the  test  of  lawfulness  is,  as  I  have  said:  is  a  right 

being  violated  ?  What  right  have  I  to  say  to  the  men  who  own  the  Pacific  Gas 
and  Electric  Corporation  that  they  shall  construct  a  plant  and  furnish  me 
current  at  a  rate  that  I  shall  fix?  and  if  I  have  no  such  right  has  my  family 
such  to  say  that  thing?  And  if  my  family  were  large  enough  to  comprise  a 
tribe  of  100,000  people,  as  some  Chinese  families  are,  would  they  thereby 
have  such  right  ?  Do  a  larger  number  make  right  that  which  with  a  smaller 
number  is  wrong?  If  so,  at  what  rate,  and  at  what  amount  by  the  addition 

10 


of  numbers,  does  wrong  change  into  right?  And  if  we  would  have  no  such 
right,  would  there  be  created  such  right  by  calling  upon  the  State  to  put  our 
demands  upon  the  Company  into  effect?  Would  not  that  be  merely  adding 
an  unlawful  force  to  our  demands,  notwithstanding  that  force  was  the  force 
of  the  State?  What  is  the  State  under  such  circumstances  but  a  tyrant,  for 
a  tyrant  is  simply  a  government  that  uses  its  force  in  behalf  of  wrong. 

Equally  wrong  is  the  policy  of  the  State  through  its  commissions  pre- 
venting competition.  Competition  should  be  favored,  not  suppressed.  The 
prohibition  of  the  State  should  be  directed  to  opposing  mergings,  and  con- 
solidations of  competitors;  once  occupying  a  field  competitors  should  be 
kept  apart  in  order  that  rivalry  may  be  maintained,  and  with  this  provision 
they  should  be  left  to  follow  their  affairs  as  the  course  of  business  determines ; 
the  state  confining  itself  to  the  relation  of  the  corporation  and  its  obligees, 
not  to  the  corporation  and  its  customers,  to  whom  there  is  owed  nothing  but 
service,  the  efficient  rendition  of  which,  as  well  as  reasonable  rates,  competi- 
tion will  secure. 

The  policy  of  eliminating  profit  from  those  businesses  which  Commis- 
sions control  has  cut  off  a  vast  fund  of  money  which  previously  went  as 
dividends  to  stockholders,  and  comprised  capital  for  new  enterprise.  Ac- 
cordingly our  young  man,  with  his  well  worked  out  project  for  promotion, 
discerns  that  he  cannot  find  the  money  ready  to  be  risked  on  his  venture ;  and 
while  the  stockholder  is  devoid  of  funds,  and  his  stock  depreciated  or 
depleted  in  value,  the  customers  to  whom  the  State  Commissions  assume 
thus  much  money  has  been  saved,  seem  none  the  richer  for  their  lower  rates. 
There  is  observed  a  prevailing  tone  of  uncertainty,  tight  money  and  hard 
times ;  the  money  all  drawn  into  the  banks  which  they  are  afraid  to  lend  and 
their  depositors  are  afraid  to  invest.  For  as  profit  is  taken  out  of  utilities, 
and  the  control  of  the  business  is  assumed  by  the  State,  which  amounts  to 
State  ownership,  without  the  cost  incurred  to  the  State  of  purchasing  the 
properties,  and  as  the  State  more  and  more  enters  upon  the  active  operation 
of  industries,  such  as  railroads,  expressage,  telephones,  telegraphs,  electric 
current  supply,  banking  and  so  on,  the  field  of  business  opportunity  and 
initiative  is  accordingly  narrowed.  This  intensifies  the  competition  for  what 

business  there  is  left  to  the  individual.     Prac- 
Attempts  to  Suppress  .  ,       ,. 

JJ  **         .  .          tices    previously    discountenanced    come    into 

Inter-County  Competition 

common   vogue;    jealousies   arise,    and   there 

is  a  disposition  to  mark  out  domains  for  doing  business  and  to  fight  off 
competitors  from  the  boundaries  thereof.  Recently  one  of  the  members  of 
the  Business  Men's  Economic  Association,  a  manufacturer  of  electroliers, 
with  an  establishment  in  San  Francisco,  had  been  installing  electroliers  in 
Oakland ;  the  operation  required  the  subscriptions  by  property  owners  and 
the  consent  of  the  City  Council.  After  he  had  pursued  this  business  for  a 
while  certain  Oakland  competitors,  finding  they  could  not  best  him  with 
the  customer,  appealed  to  the  City  Council  to  refuse  him  further  permission 
to  place  electroliers  in  Oakland,  on  the  ground  that  all  such  business  in  Oak- 

11 


land  belonged  to  Oakland  manufacturers,  and  competitors  from  across  the 
bay  should  be  kept  out.  This  idea  was  regarded  by  the  Council  as  having 
merit  and  they  refused  to  grant  the  petitions  of  the  San  Francisco  house, 
which  was  thereupon  obliged  to  retire  from  that  field.  A  while  ago  a  lead- 
ing San  Jose  newspaper  refused  to  print  an  advertisement  of  a  San  Fran- 
cisco merchant,  upon  the  ground  that  all  of  that  trade  which  San  Jose  con- 
tained belonged  to  the  merchants  of  San  Jose,  and  the  paper  would  be  acting 
a  traitor's  part  toward  them  if  it  would  facilitate  the  incoming  of  a  com- 
petitor from  San  Francisco  to  take  the  bread  out  of  their  mouths.  But  for 
the  existence  of  the  Constitution  of  the  United  States  it  cannot  be  denied 
that  both  the  municipalities  of  Oakland  and  San  Jose  would  seek  to  separate 
themselves  from  San  Francisco  with  a  wall  of  protective  tariffs,  just  as  the 
Supervisors  of  San  Francisco  recently  proposed  to  this  city  to  separate 
itself  from  the  rest  of  the  State,  through  a  charter  amendment  providing  the 
payment  of  a  bounty  of  ten  per  cent  upon  all  goods  purchased  by  the  city 
produced  within  its  limits. 

Here  then,  we  see  return  of  the  old  principle  .which  I  remarked  as  em- 
ployed in  England:  special  privilege  for  a  favored  few.  Pervading  this 
tendency  has  been  the  view,  the  feeling  or  belief,  that  there  is  in  the  realm 
of  affairs  just  so  much  business  to  be  done,  just  so  much  work  to  do,  and  that 
if  anyone  else  comes  into  the  field  to  do  any  of  it,  there  is  thus  much  less  left 
for  us  to  do.  Hence  the  other  fellow  must  be  kept  out  for  our  benefit.  This 
is  the  principle  upon  which  the  whole  structure  of  labor  unionism  is  based ; 
it  is  expressed  in  all  union  regulations,  and  in  all  labor  legislation — the 
keeping  of  somebody  else  from  doing  something  in  order  that  we  shall  have 
something  to  do.  Convicts  and  others  confined  by  the  State  are  prevented 
from  employing  their  energies  in  producing  goods  to  turn  upon  the  market, 
for  it  is  believed  if  they  did  so,  the  market  would  to  such  extent  be  supplied, 
and  there  would  be  just  that  much  less  work  left  to'be  done  by  "labor"  in 
supplying  the  market.  Immigrants  are  prohibited  from  entering  the  coun- 
try, because  it  is  assumed  that  if  they  came  in  they  would  do  work,  and  that 
would  mean  so  much  less  work  left  for  the  native  laborer  to  do.  You  are 

now  witnessing  a  battle  going  on  in  the  State  Legis- 
The  Apprentice  -  **  *  ,  &  ,  .„  .  , 

,_  _   .         ,         lature  over  the  passage  of  a  bill  aimed  at  securing 

Measure  Before  the  ,      ^  ,.,       .     •        «.      •  ^  •   j 

.  ,  to  the  California  boy  his  right  to  enter  industry  as 

State  Legislature.  .         .  t         ,.       .,,       ,      .  , 

an  apprentice  without  being  interfered  with  and  pre- 
vented by  labor  unions.  This  is  the  first  instance  in  the  history  of  the  nation, 
and  indeed,  so  far  as  I  know,  of  any  nation,  where  in  modern  times  the  force 
of  the  State  will,  if  the  bill  passes,  be  brought  to  bear  against  the  union  in 
extinction  of  one  of  its  cardinal  elements.  The  restriction  of  the  number  of 
journeymen  through  limiting  the  number  of  apprentices,  is  a  principle  which 
has  come  out  of  the  old  mediaeval  trades  guilds,  which  Lord  Bacon  very 
properly  called,  "fraternities  of  evil."  The  doctrines  of  the  unions  of  today 
are  in  all  essential  respects,  the  doctrines  of  those  institutions  of  the  dark 
ages.  Let  us  hope  that  the  bill  shall  pass  and  that  with  this  wedge  entered 

12 


in  which  the  force  of  the  State  is  brought  to  combat  the  force  of  the  union  in 
behalf  of  the  liberty  of  the  boy,  that  from  now  on  the  force  of  the  State  may 
be  further  brought  to  combat  the  union  in  behalf  of  the  liberty  of  the  man. 

For  the  whole  doctrine  that  underlies  this  conduct  is  wrong.  Men  do 
not  prosper  by  restricting  others,  but  through  the  co-operation  of  others. 
When  the  union  restricts  output  in  the  belief  that  if  a  larger  yield  were  pro- 
duced the  market  would  be  over  supplied  and  men  laid  off,  it  is  mistaken. 
When  it  keeps  out  of  industry  apprentices,  immigrants,  and  advertises 
throughout  the  nation  that  there  is  no  work  in  California  so  don't  come  here, 
when  as  in  Australia  it  advises  women  to  reduce  the  birth  rate  because  there 
are  already  more  men  than  there  are  jobs  within  the  country,  and  it  is 
getting  worse,  not  better,  the  conditions  which  they  are  fighting  are  the 
very  conditions  which  their  own  conduct  has  brought  about.  The  more 
goods  you  produce  the  more  goods  must  be  produced ;  the  more  men  there 
are  in  industry  the  more  jobs  there  will  be  calling  for  men ;  the  greater  the 
output,  the  greater  the  call  for  labor.  A  thing  once  produced  requires  other 
things  to  go  with  it  to  make  it  fit  for  consumption.  Without  sheep  you  can- 
not have  wool;  without  wool  you  cannot  make  cloth;  without  cloth  you 
cannot  make  clothes;  without  clothes  the  store  on  Market  Street  has 
no  reason  for  existence ;  and  so  on  throughout  the  entire  realm  of 
industry.  Is  there  no  need  for  sheep?  Is  there  too  much  wool?  Who 
can  number  the  men  in  San  Francisco  who  today  would  get  another 
suit  of  clothes  if  they  had  the  means  to  do  so,  if  they  could  find  a 
larger  place,  or  any  place,  in  industry  for  their  services  so  they  could  get 
the  wherewithal  to  buy  the  clothes!  It  is  abundance;,  plenty,  that  makes 
business ;  that  makes  opportunity  for  labor,  that  makes  the  field  for  initiative, 
and  abundance  can  only  be  attained  where  freedom  exists  for  men  to  employ 
their  efforts,  where  no  one  is  kept  out  of  industry  by  the  interference  of  a 
union,  by  restrictive  laws,  or  by  laws  which  burden  business  with  taxes  and 
hamper  it  with  obstructions,  so  that  men  find  business  difficult  and  often  im- 
possible to  do ;  for  as  Mr.  William  Sproule  well  says :  "the  idle  man  is  idle 
because  the  employer  is  first  idle." 

The  encroachment  of  the  State  upon  the  domain  of  business  through  the 
processes  we  have  noted,  is  incident  to  another  great  influence  of  restriction 
in  the  action  of  the  labor  union  upon  wages.  It  is  the  policy  of  the  union 
to  assert  a  steady  pressure  upon  industry  for  increase  of  wages,  in  the  belief 
that  every  extra  dollar  the  workman  receives  is  a  dollar  of  additional  wages. 
This  is  not  a  fact.  The  money  the  laborer  receives  is  but  nominal  wages ; 
his  real  wages  is  the  things  he  buys  with  the  money.  His  operation  of  exact- 
ing repeatedly  higher  wages  has  driven  up  the  cost  and  prices  of  all  articles, 
it  has  not  given  the  workman  higher  wages;  it  has  in  truth,  reduced  his 
wages ;  for  prices  always  rise  ahead  of  the  rise  in  wages.  In  the  period  from 
1892  to  1912  there  was  a  rise  in  average  wages  per  hour  in  the  United  States 
of  40  per  cent,  and  average  weekly  earnings  per  employee  increased  thirty  per 
cent.  But  during  the  same  time  the  average  retail  prices  of  food  increased 

13 


over  fifty  per  cent.  The  way  for  the  laborer  to  tell  whether  his  wages  have 
increased  or  not,  is  not  to  count  out  the  coin  he  has  received  in  his  pay 
envelope  on  two  different  dates,  but  to  ascertain  on  one  date  how  many  hours 
of  work  it  would  take  to  buy  a  pound  of  flour,  a  pound  of  beef,  of  pork,  of 
lard,  a  dozen  eggs,  and  so  on  through  the  list  of  common  articles  of  food 
and  clothing  of  equal  grade,  as  compared  with  the  number  of  hours  it  would 
take  to  buy  such  on  another  date.  By  this  test  he  will  find  that  the  highest 
paid  labor  union  workman  in  San  Francisco  today  is  receiving  less  wages 
than  he  got  in  the  same  trade  in  this  city  thirty  years  ago,  and  when  his  labor 
union,  as  we  now  know  it,  did  not  exist.  , 

The  real  effect  of  his  increase  of  wages  is  to  restrict  the  market  for  his 
product  through  increasing  prices,  thereby  contracting  business  and  throw- 

,  ___  ing  men  out  of  work.     This  makes  times  hard;  it 

Increased  Wages  .  ,  f    . 

__„  .  .    T  T.  •  tightens  the  pressure  of  the  union  cordon  around 

Which  Increase  Prices       .       .  \  1t 

,,     ,  the  shop  to  keep  awav  all  persons  not  members 

Narrow  the  Market.  ..   .         .  <•     , 

of  the  union,  so  many  of  whom  are  out  of  employ- 
ment. It  closes  the  books  of  registration  of  the  union  against  new  men  com- 
ing into  the  city  to  find  work,  so  that  increase  of  population  of  the  city  is  held 
back.  While  prices  of  commodities  are  constantly  rising1,  it  forces  a  demand 
for  cheaper  service  from  public  utilities,  to  procure  which  there  arise  move- 
ments to  pass  such  industries  over  to  the  State,  so  they  may  be  operated 
without  profit,  at  cost,  as  the  post  office  is  operated.  As  this  force  continues 
to  exist  and  increase  its  pressure,  the  State  is  moved  to  extend  its  dominion 
beyond  the  line  of  public  utilities  and  into  the  domain  of  commodities.  It 
becomes  a  producer,  manufacturer,  shipper.  With  every  step  it  takes  in  this 
direction  the  field  of  private,  of  individual  initiative  is  lessened,  and  the 
citizen,  this  youth  of  whom  we  speak,  lapses  from  an  independent  character 
to  a  State  dependent,  seeking  the  favor  of  some  politician  to  get  or  hold  a 
job.  Such  has  been  the  history  of  the  movement  which  is  now  upon  us  in 
all  countries  where  it  has  progressed  further  along  the  lines  of  its  course 
than  it  has  yet  developed  with  us ;  in  Australia,  in  Germany,  in  Russia,  and 
to  a  lesser  extent  in  France  and  England.  Individual  initiative  failing 
through  a  constantly  lessening  field  of  possible  action,  initiative  by  the  State 
becomes  necessary ;  and  we  have  the  State  built  up  into  an  ever  stronger  and 
stronger  autocracy  and  despotism.  To  Europe  the  condition  meant  ascend- 
ant militarism ;  to  the  United  States  it  means  the  passing  of  the  republic  and 
the  supplanting  of  free  institutions  with  a  socialistic  regime  which  is  essen- 
tially a  monarchical  establishment.  We  shall  soon  have  in  the  United  States 
a  ruling  class,  under  whose  sway  free  institutions  vouchsafed  us  by  our  con- 
stitution, will  disappear. 

So  then  we  have  our  boy  in  the  midst  of  a  vortex  of  influences  which  are 
moving  swiftly  to  contract  the  field  of  his  possible  business  endeavors ;  which 
by  hampering  him  on  every  hand  are  suppressing  his  activities  and  emasculat- 
ing him  of  his  energies,  eliminating  his  initiative  because  of  the  rapid  closing 
of  the  avenues  in  which  initiative  may  be  exercised.  What  effect  is  this 

14 


having  and  will  it  have  upon  the  progress  of  the  State?  Here  we  have  in 
these  158,000  square  miles  of  territory  the  grandest  area  of  the  earth's  surface 
that  exists  under  the  sun.  There  is  no  tract  of  land  anywhere  in  the  world 
more  favored  by  nature  than  is  California.  It  would  seem  that  every  material 
thing  that  the  human  heart  could  wish  has  been  stored  by  the  Creator  in  the 
hills  and  valleys,  the  plains  and  on  the  shores  of  this  State,  under  a  climate  the 
balmiest  and  most  vitalizing  anywhere  to  be  found.  Every  man,  woman  and 
child  in  this  State  should  live  in  plenty,  should  enjoy  his  full  mete  of  luxuries 
which  this  civilization  has  so  abundantly  provided,  and  which  should  be  fairly 
within  the  reach  of  all.  And  yet,  with  a  comparative  handfull  of  population 
to  which  the  surface  of  the  State  could  sustain,  we  have  continuous  hard 
times  for  the  multitude,  thousands  of  men  out  of  work  and  other  thousands 
half  or  less  employed ;  industry  flags,  and  in  many  features  halts,  our  manu- 
factures, our  shipping,  our  trans-oceanic  trade,  move  forward  with  trifling 
growth — what  is  the  cause  of  this?  The  cause  is  a  suppression  of  human 
liberty,  of  the  freedom  of  the  man.  The  pendulum  of  progress  which  has 
swung  forward  since  the  days  of  Elizabeth,  which  received  its  greatest  im- 
pulse at  the  foundation  of  this  nation  upon  this  vast  continent  of  new  land, 
is  now  taking  a  backward  swing,  again  in  the  direction  of  special  privilege, 
of  denial  of  right. 

To  remedy  these  conditions  and  bring  about  activity  in  business,  abund- 
ance in  wealth,  equitableness  in  distribution  of  wealth,  we  must  move  in  the 

.    --,  ,   contrary  direction  to  the  course  now  being 

The  Remedy  is  Freedom,  and  j      T    •    •  1-       •         f  <• 

_>        .     .  pursued.     It  is  m  the  direction  of  freedom- 

Opposition  to  Restriction. 

and  liberty.     We  must  hold  government  to 

its  function  of  governing,  and  keep  it  out  of  business,  and  away  from  inter- 
fering with  the  affairs  of  business  men,  prohibiting  it  from  injecting  itself 
into  business  save  only  where  some  right  has  been  violated.  We  should  set 
our  faces  against  restrictive  legislation,  against  laws  that  obstruct  free  action, 
that  hamper  trade,  that  increase  taxation.  We  should  firmly  oppose  any 
raise  in  wages  where  the  price  of  the  product  or  service  must  be  raised  to- 
pay  the  increased  wage.  We  should  oppose  so-called  labor  legislation  almost 
in  toto.  Being  predicated  upon  erroneous  economic  principles,  there  are 
scarcely  any  of  the  demands  of  the  unions  which  are  anything  but  a  harm  to 
the  laborers  themselves  and  are  correspondingly  hurtful  to  all  business. 
The  thought  of  the  business  world  should  be  turned,  not  to  how  to  get  an 
advantage  over  some  one  else  through  legislation,  but  to  enlarging  the  oppor- 
tunities to  labor  through  freeing  industry,  and  increasing  business  through 
increasing  product  and  adding  to  instead  of  lessening  or  holding  back,  the 
number  of  workers.  By  these  means  we  can  soon  overcome  the  prevailing 
tendency  to  restricted  industry  and  governmental  centralization,  and  we  can 
restore  business  to  its  normal  status,  which  is  a  condition  of  unceasing 
activity,  under  which  every  one  is  employed  and  all  have  all  the  business 
they  severally  care  to  do:  under  which  also  goods  are  cheap,  profits  liberal 
and  salaries  and  wages  high,  not  artificially  high,  as  is  now  the  case,  but 

15 


naturally  high,  as  occurs  in  a  condition  of  free  industry  where  men  must  be 
induced,  by  satisfactory  remuneration,  to  accept  employment. 

And  in  conclusion  let  me  further  observe :  that  in  a  republic  all  change, 
all  correction  of  error  in  the  social  organization,  must  originate  with  and 

«     • .         ,  T-,   .                r   ,  move  from  the  body  of  the  people,  proceeding 

Continued  Existence  of  the  .                                 ,    .          . 

_.        ...    _                   TT  thence  towards   and   investing    the    heads  of 

Republic  Dependent  Upon  ,       ,   .        „ 

„.                  ,  _  government  who  are  placed  in  office,  not  to 

Intelligence  and  Courage  7    ,  ,«        ,                   ,           ,    ,    . 

^r  T     >>•  •         i_-  install  and  operate  plans  of  their  own,  but  to 

Of  Its  Citizenship.  ,      ,         .„  v .    . 

do  the  will  of  the  people.     It  is  not  so  in  a 

monarchy.  There  the  ruling  head  and  his  group  sway  the  nation,  whether 
for  the  benefit  of  the  people  or  not  depends  upon  the  temperament  and  in- 
telligence of  the  potentate  and  the  character  of  his  advisers.  With  their 
decrees  the  citizen  has  very  little  to  do,  save  to  obey.  As  to  what  this  method 
means  to  the  people  you  need  only  to  cast  your  eyes  over  the  world  today, 
beyond  the  borders  of  your  own  country,  and  remark.  Centralized  power 
and  war  have  always  been  correlative  institutions.  Why  they  are  necessarily 
such,  I  cannot  pause  tonight  to  explain.  But  of  this  fact  you  may  be  sure : 
that  a  republic  can  only  remain  such  so  long  as  its  people  manifest  the  intelli- 
gence to  govern  it  in  a  way  that  order  may  be  maintained,  and  all  men 
within  it  may  be  nourished.  When  conditions  within  it  arise  that  necessarily 
provoke  repeated  and  widespread  disorder,  and  forces  appear  that  men  by 
millions  can  no  longer  find  sustenance  at  the  door  of  industry,  and  when  the 
people  of  that  republic  are  impotent  to  move  the  remedy  for  this  condition, 
when  they  do  not  possess  the  thought,  or  having  the  thought  have  not  the 
courage  to  effect  the  changes  needful  to  restore  the  normal,  then  foe  very 
certain  that  that  republic  is  rapidly  disintegrating  and  is  evolving  into  some 
other  form  under  which,  in  some  manner,  men  in  time  of  peace  can  dwell 
sustained  and  safe,  however  incident  to  such  government  may  be  periods  of 
active  war. 

It  is  to  the  intelligence  of  the  people  therefore,  that  we  must  look  to 
rescue  the  nation  from  its  present  plight  and  tendency;  and  where  among 
the  people  in  this  day,  in  this  period  of  our  civilized  development,  is  this 
intelligence  to  be  found — for  bear  in  mind,  it  must  express  itself  not  only 
with  the  thought,  but  with  the  material  means  to  put  the  thought  to  practical 
application  and  effect?  There  is  no  doubt  that  it  is  through  the  men  of 
affairs,  the  business  world,  that  this  change  must  be  brought  about,  if  it  is  to 
occur,  and  the  test  is  upon  them.  Are  they  able  to  understand,  to  realize  the 
condition  which  environs  them,  and  to  recognize  the  forces  that  are  moving 
within  it,  to  perceive  the  direction  of  those  forces  and  to  evolve  and  apply 
the  methods  to  stay  their  harmful  tendencies,  to  bring  about  safety  to  busi- 
ness, security  to  property,  perpetuity  to  the  republic?  If  the  business  world 
has  in  it  the  men  able  to  be  moved  to  this  task,  then  all  is  well ;  if  it  has  not, 
then  in  my  humble  judgment,  there  is  before  us  a  far  different  career  from 
what  we.  in  this  country,  have  experienced  in  the  past. 

16 


WRITINGS  OF  JOHN  E.  BENNETT 

BOOKLETS 

The  following  are  short  articles  published  in  a  form  to  be  easily  carried  in  the 
ordinary  business  envelope,  together  with  a  letter,  under  a  two-cent  stamp. 

WHAT  WILL  BECOME  OF  BUSINESS? 

Being  an  abridgment  of  the  pamphlet,  THE  INDUSTRIAL  UNREST,  and  de- 
signed for  use  as  either  an  introduction  to  the  reading  of  that  paper,  or  as  a 
synopsis  of  it  for  the  requirements  of  the  busy  man. 

THE  END  OF  BUSINESS 

A  short  essay  upon  the  passing  of  the  employer's  right  to  discharge  an  employee, 
hence  to  maintain  control  over  his  business;  the  incident  vesting  in  the  employee 
of  a  property  right  in  the  employer's  establishment  by  virtue  of  the  induction  of 
the  employee  therein,  and  the  attitude  of  the  government  of  the  United  States 
through  its  Department  of  Labor  in  reference  to  this  demand.  The  effect  such 
principle  must  have  upon  business  and  statement  of  the  needful  changes  in  the 
industrial  and  political  world  to  restore  freedom  and  bring  prosperity  to  industry. 

AN  ERRONEOUS  VIEW-POINT 

Showing  the  errors  of  the  popular  ideas  for  remedies  of  the  industrial  unrest, 
in  which  erroneous  views  many  heads  of  large  businesses  are,  through  ignorance 
of  the  principles  of  correct  solution,  now  concurring.  A  discussion  of  the  relation 
of  the  idle  armies  of  America  to  the  active  military  armies  of  Europe,  and  of  the 
prevailing  indisposition  to  regard  industrialism  as  a  structure  workable  on  lines 
of  natural  law. 

AS  SEEN  IN  AUSTRALASIA 

A  review  of  the  recent  report  of  the  Commission  of  the  National  Association  of 
Manufacturers  upon  "Industrial  Conditions  in  Australasia,."  the  same  being  a  sur- 
vey of  the  operations  of  trades  unionism  and  its  concomitant  legislation  in 
Australia  and  New  Zealand,  with  information  gathered  upon  the  subject  from  other 
sources.  In  these  Colonies  the  trade  union  principle  is  probably  further  developed 
than  in  any  other  region  of  the  world.  Having  control  of  the  respective  govern- 
ments, the  unions  have  been  able  to  apply  their  doctrines  with  the  force  of  law. 
All  the  various  legislative  and  other  schemes  and  expedients  just  entering  the 
domain  of  business  here,  have  there  been  in  existence  sufficiently  long  to  test  out 
their  value  to  society.  The  result  has  been  a  highly  increased  degree  of  industrial 
unrest,  incessant  strikes  and  disturbances,  restricted  development,  slow  growth 
and  business  stagnation;  the  artificial  increasing  of  wages  correspondingly  raising 
the  cost  of  living  with  incidental  widespread  impoverishment,  the  workers,  as 
stated  by  a  leading  Australian  economist,  creating  "a  rod  for  their  own  backs." 
The  inquiry  throws  much  light  upon  the  future  of  California  under  labor  unionism, 
and  emphasizes  the  necessary  relief  to  the  pressure  of  population  under  prevailing 
erroneous  economic  policies  producing  idle  multutudes  in  a  sparsely  settled  coun- 
try, which  relief  the  existing  European  war  is  affording  to  Australasia  in  the 
decimation  of  her  expeditionary  contingents. 


BUSINESS  MEN'S  ECONOMIC  ASSOCIATION 
CHAIRMAN.  G.  X.  WENDLING 

VICE-CHAIRMEN 

J.  A.  FOLGEIR  HENRY  T.  SCOTT 

W.  M.  ALEXANDER  JOHN  A.  BRITTON 

BRACE  HAYDEN  ROBERT  DOLLAR 

W.  H.  TALBOT 

DIRECTORS 
G.  X.  Wendling 
W.  A.  Grubb 
J.  W.  Mason 
Alexander  D.  Keyes 
C.  E.  Green 
Robert  H.  Swayne 
James  H.  Schwabacher 

San  Francisco  Office — 1310-11  Humboldt  Bank  Bldg. 


Organized  in  an  endeavor  to  arouse  the  business  world  to  a  consciousness 
its  peril  in  the  presence  of  the  industrial  unrest;  to  show  the  cause  of  that  unrest 
and  its  inevitable  culmination  in  the  suppression  of  business  as  a  function  of  th( 
citizen,  and  the  convergence  of  industry  and  affairs  into  the  Socialized  State, 
suiting  in  unavertible  war.    To  point  out  the  rational  and  easily  understood  solu- 
tion of  this  condition,  which  abides  in  a  change  of  certain  public  laws,  and  ii 
resisting  certain  policies  of  labor  unions;  and  to  educate  the  public  in  bringinj 
these  changes  about,  which  will  liberate  business  from  the   restrictions  whi< 
hamper  and  prevent  its  transactions,  thereby  calling  into  existence  a  state  of  great 
business  and  industrial  activity,  making  wealth  abundant,  its  distribution  jus 
securing  the  inviolability  of  property  in  the  hands  of  its  owners,  and  insuring 
continuous  peace  and  tranquility. 

Excerpt  from  the  By-Laws  of  the 
BUSINESS  MEN'S  ECONOMIC  ASSOCIATION 

Membership  of  this  Association  shall  be  three  kinds,  viz: 

Full  membership,  the  fee  for  which  is  $10.00  per  annum  and  shall  entitle  th< 
holder  to  free  receipt  of  all  literature  and  free  admission  for  himself  and  familj 
to  all  lectures,  issued  or  delivered  by  the  Association. 

Club  membership  the  fee  for  which  is  $2.00  per  year  and  entitles  the  holder  t< 
free  receipt  of  all  literature  issued  by  the  Association  and  to  admission  to 
lectures  upon  payment  of  one-half  the  regular  price.  Club  members  are  admittec 
only  in  those  cases  where  at  least  one  full  membership  is  held  in  the  Associatioi 
by  the  corporation,  firm  or  house  in  which  the  proposed  Club  member  is  employ* 

Professional  membership,  the  fee  for  which  is  $5.00  per  year,  is  limited 
members  of  the  professions,  and  entitles  the  holder  to  free  receipt  of  all  Associa-j 
tion  literature  and  free  attendance  upon  all  lectures. 


Syrac 


Bros. 
Makers 


YC   15316 


C.BERKELEY  LIBRARIES 


RETURN     CIRCULATION  DEPARTMENT 
TO—*      202  Main  Library 

LOAN  PERIOD  1 
HOME  USE 

2 

3 

4 

5 

6 

ALL  BOOKS  MAY  BE  RECALLED  AFTER  7  DAYS 

Renewals  and  Recharges  may  be  made  4  days  prior  to  the  due  date. 

Books  may  be  Renewed  by  calling     642-3405. 


DUE  AS  STAMPED  BELOW 

0  DISC  CIRC  Niw  ; 

v^ 

UNIVERSITY  OF  CALIFORNIA,  BERKELEY 
FORM  NO.  DD6  BERKELEY,  CA  94720 


